The south Wales town of Merthyr Tydfil feels like somewhere haunted by ghosts: not just of the coal industry that once underwrote hundreds of local livelihoods, or the renowned Hoover factory that closed four years ago – but of a way of collective being that slipped away during the 1980s.

"It's a dead-end place now," says 78-year-old Jean Stanton, waiting outside the local Salvation Army shop where she does voluntary work.

"It used to be booming. Lovely. But that's all gone."

At the mention of Margaret Thatcher, some of Merthyr's younger residents talk about fragments of this week's news – the cost of her funeral, mainly – and the odd second-hand memory of her time in office.

But for older people, the recollections remain vivid and the wounds are apparently still raw. With them, such frippery as what David Beckham has said by way of tribute or whether Radio 1 will play Ding Dong! The Witch Is Dead count for nothing. Instead, when I ask for opinions about Thatcher's life and death, people talk about events that happened 30 years ago as if they had only just drawn to a close – particularly when it comes to the miners' strike of 1984-85, the bitter end of which spelled the start of her most turbocharged phase.

After two days on the road, this much is clear: driving around the UK to assess Thatcher's legacy is, by turns, fascinating, sad, bittersweet and surprisingly moving. Usually, trying to start conversations about mainstream politics – let alone the events of three decades ago – can be unproductive and frustrating. But this week, there's a sense of scores of Britons peering back though time, and thinking about then, and now. And in the midst of so many chats about recent history, mundane aspects of the modern British expanse – the ubiquitous Tesco, derelict factories, even the M25 – suddenly assume a symbolic potency.

A few miles from Merthyr is the site of the old Merthyr Vale colliery, a byword for the unimaginable horror of the 1966 Aberfan disaster and one of the incidents that, two decades later, arguably pointed to the miners' eventual defeat. On 30 November 1984, a taxi driver named David Wilkie was driving a miner who had returned to work to the pit when his car was hit by a concrete post, dropped from a bridge by two strikers. Thatcher said she was enraged "at what this has done to the family of a person only doing his duty and taking someone to work who wanted to go to work"; for the National Union of Mineworkers, it represented a further blow to morale and confirmation that things were spiralling out of control.

Outside Tesco, I meet Malcolm Thomas, 73, a retired electrician, and Bert Lang, 67, who once worked at the Merthyr Vale pit. Like other locals, they wearily mention Arthur Scargill's serial failures as the leader of the NUM and debates that can still flare up about the way he led the miners through something that felt close to a kind of civil war.

The killing of David Wilkie, says Thomas, "put a dent in the union's end – it was a stupid thing to do." The strike, he tells me, "is still embedded in us down here. It's still something to talk about every day. Someone will always fetch it up: 'What would have happened if it had gone the other way?'"

For other people, though, all that means next to nothing. Tamzin Cross, 16, lives in nearby Aberdare: she is unemployed and used to scores of job applications not even prompting a reply. What, I wonder, does she know about the woman staring from the front pages of all those newspapers? "I know she was the prime minister of Britain," she tells me. "And she was quite unfair to the lower classes."

It may be some token of how much Merthyr has changed that when I ask her if she knows what a trade union is, I draw a blank. "I don't know," she says. "I should know, probably."

My next stop is the ex-steel town of Ebbw Vale, the heart of the parliamentary constituency once held by that local Labour titan Aneurin Bevan, and inherited by Michael Foot, whose time as Labour leader so highlighted the chasm that then separated the UK's two main parties.

In one of the terraced streets cut into the hillside, I spend an hour in the company of two former councillors, and pillars of local life, John Rogers, 74, and Don Wilcox, 77. Just about every word they say attests to a culture that Thatcher and her followers did not just not understand, but often seemed to hold in contempt – and the way her time in office left so many of the UK's former industrial heartlands stranded. "What happened here wasn't a slow slide," says Wilcox. "It was a sudden shock. And it almost killed us."

There is, moreover, a twist to their story that speaks volumes about how much Thatcherism changed not just the Conservatives, but a Labour party that was eventually convinced that it had to adapt to what she had done. After decades of passionate Labour activism, the two of them left the party to co-found a local force known as People's Voice.

It was formed in response to the alleged imposition of a New Labour insider as the candidate for the 2005 general election via an all-women shortlist, and built on a deep ideological estrangement from the party to which they gave a huge share of their adult lives. What rankled, they say, was how much Tony Blair took from Thatcher, not just in terms of her free-market economics, but their shared willful, imperious style of leadership.

The People's Voice upsurge had one startling consequence: in this once-rock solid constituency, between 2006 and 2010, Labour had neither the MP, nor the Welsh assembly member.

But three years ago, when Labour wrested the Westminster seat back, People's Voice folded, and Wilcox and Rogers now speak as two defenders of a politics that Thatcherism's long legacy has pushed to the fringes. "My politics is based … on collectivism," says Wilcox. "And, in the past, the basis of collectivism came from the non-conformist churches and radical trade unions." He suddenly looks pained. "That's the sort of collectivism we are losing. And unless we get that back, let's be honest, my sort of politics is dead in the water."

Ninety minutes down the M4 in Bristol, 200 residents of the Easton area spent Monday evening staging a celebration of Thatcher's passing that ended with a small-scale riot. When I stop to canvass opinions in the nearby enclave of Stokes Croft – the scene, famously, of violence sparked by the opening of a branch of Tesco – mention of this causes at least two on-street arguments. "Disgusting," says one man. "If people wanted to have a party, then fair enough," reckons another. At one point, I find myself deep in a conversation about that byword for the pre-Thatcher UK, British Leyland. Here, though, what's most interesting is a sense of what happened to one strain of left politics in the wake of the 1980s' endless setbacks: what was once known as socialism reinvented not as a grand political project, but a matter of local culture and personal preference.

Outside the Magpie, a former charity shop now squatted by artists and activists, a 33-year-old local who calls himself Tom Roots says: "She was an icon of a lot of things we don't like: an embodiment of what we want to move away from. And I don't think she'd have liked us." Does the Stokes Croft life represent some kind of alternative to Thatcher's immovable legacy? "It's very different. This is social living. It's not about amassing lots of money and shutting yourself away from other people."

I spend the night at a gleaming budget hotel on the M25 – the motorway opened by Thatcher in 1986, seemingly as an asphalt tribute to car-owning individualism (Jeremy Clarkson, let us not forget, will be at the funeral). By way of visiting somewhere that may have a rosier view of the Thatcher story, I'm en route to Hornchurch, on the Greater London/Essex borders, where many of the streets are lined with former council houses built in a spurt of postwar optimism and eventually sold under the right-to-buy programme. In 1980, in fact, Thatcher herself arrived at 39 Amersham Road in the Harold Hill district to ceremonially commemorate the 12,000th house sold, to John and Mary Patterson. Pictures of the occasion perfectly capture the era: Thatcher resplendent in a floral-patterned dress clutching the deeds; the Pattersons evidently thrilled at having joined the property-owning democracy for a price of £8,000, with a deposit of a mere £5.

Amersham Road is now split between owner-occupied homes – highlighted by the giveaway external fixtures and fittings – and those still occupied by tenants. The Pattersons have long since left number 39. The current owners, Amy Masters, 27, a London-based PA, and her teacher husband, Altan, 33, have just sold their three-bedroom house for £183,000, reportedly to a Lithuanian student. They have traded up "a little bit" – they're moving 20 miles away to Rayleigh. "I wasn't born when Margaret Thatcher was around," says Amy, who has spent much of the past week answering the door to TV crews and journalists. "But she left the country in a better state. She certainly didn't make it any worse."

Down the street, however, at least one person sounds less convinced. At number 17, June Bissom, 50, tells me that in her 16 years on Amersham Road, the place has definitely changed. On one side of the street, former right-to-buy houses have been long since sold to buy-to-let landlords, and their tenants seem to come and go. "It's less neighbourly round here now. And rougher. More break-ins. The hospitals are shutting down, police stations are closing down, and they're building new houses … it's just overcrowded, everywhere. I think we're going back to the bad old days." When were they? A grim laugh. "The 80s, I suppose." The right to buy was a good idea, "but now, people can't afford to buy their own home, can they? It's tough now, especially if you're young." Her 19-year-old son has been looking in vain for a car mechanic apprenticeship. For him, she says, property ownership looks like an impossible dream.

Back on the M25, I meet Scott Parker, 40, from Bishop's Waltham in Hampshire, who is on his way to Salisbury Plain to lay telephone cables for the army. One mention of Thatcher and he's away: another person, it seems, happy to take the opportunity to look back 30 years. "She gave everyone the chance to own their own home," he says. "She got us out of that trade union stuff, where we was being held to ransom. And I don't think today's politician would have the arseholes, basically, to do that. Like or loathe her, she told you the truth. Today's ones [politicians] just tell you what they think you want to hear."

I cast my mind back to Merthyr Tydfil, and wonder: does he feel sorry for any of the places that had it rough during the 1980s? "Yeah," he says. Then a pause. "Yeah." Another pause. "But it's hard, isn't it, cos today's politicians would still have done what she done, if you know what I mean. But you knew where you were with her. You might have been at the bottom of the pile, but you knew where you stood."